The question really needs to be asked – do we have a nincompoop running our Ministry of Finance?
Firstly, my question was addressed to the Minister of Finance. For the third time this Parliamentary sitting, he refused to answer the question directly. I had asked for the Minister’s reply, but instead I got 1MDB’s reply. This is once again a clear cut abdication of Ministerial responsibility for fear that the 1MDB’s reply may be untruthful.

Secondly, the above disclaimer by Dato’ Seri Najib Razak is even more ridiculous given that he was the person who diectly approved the US$1.9 billion of loans to the Petrosaudi International Limited’s (PSI) subsidiary. In fact the actual total lent to PSI is even higher at US$2.03 billion via the subscription of Murabaha Notes, and not the US$1.9 billion I quoted in the question.

Essentially, I had asked the Finance Minister why he approved the loans, but he needed 1MDB to give the reason why he approved the loans. Am I to conclude that we have a nincompoop for a Finance Minister who doesn’t even know why he approved US$2.03 billion to be lent to some foreign company and had to ask 1MDB to give the response?

Thirdly, the reason provided by the Minister (based on the information given by the 1MDB management) defies all business logic. He said that the approval of the loan was to reduce the risk exposure as opposed to holding an equity stake in the joint venture with PSI.

How in the world would the risk be any lower when 1MDB would have absolutely no control over how the US$2.03 billion would be spent by PSI, as compared to having joint management control via an equity stake in the 1MDB Petrosaudi joint venture? Worse, how can Dato’ Seri Najib Razak accept the “collateral” of a corporate guarantee from PSI for the US$2.03 billion loan when the paid up capital of PSI was less than US$150,000? Bank Negara Malaysia would have demand the sacking of any CEO of any Bank in Malaysia who exposes the country’s financial system to such credit risks.

The response also doesn’t explain why Dato’ Seri Najib Razak approved multiple increases in loans to PSI. 1MDB had originally invested US$1 billion in the joint venture company in 2009. The equity stake was converted to a US$1.2 billion loan via the subscription of Murabaha Notes in June 2010. However, 1MDB went on to lend even more money via additional subscriptions totalling US$830 million of Murabaha Notes throughout the 2011 financial year, adding up to US$2.03 billion.

Hence, if indeed the joint venture was so risky that it demands the conversion of equity to US$1.2 billion, then why did the Prime Minister continue to approve additional US$830 million of lending to PSI?

If the reply provided by the Dato’ Seri Najib Razak is indeed a truthful and accurate reply, then Malaysians have no choice but to conclude that we don’t only have a reckless Finance Minister lending such large sums of money, we have the stupidest and most unqualified Finance Minister in the history of Malaysia. What a nincompoop.

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About Me

I was elected in March 2008, the Member of Parliament for Petaling Jaya Utara under the Democratic Action Party (DAP). I'm also the DAP National Publicity Secretary, as well as the investment liaison officer for the Penang Chief Minister based in the Klang Valley.

Before joining politics full-time in January 2007, I was the CEO and founder of a Malaysian IT company, publicly listed in Singapore. I divested all my shares in the company to be able to serve the community and take part in socio-political affairs of Malaysia.

I've always had faith that there has been a guardian angel looking after me all these while - my personal well-being, my education, my career. Some will call it "God's will", some "fate" while some others, "destiny". I strongly believe that it is time for me to repay the kindness and fortune showered on me by my family, the society and of course, not forgetting, my guardian angel. :-)